Sorrell predicts ad recovery in China and India first

WPP CEO Sir Martin Sorrell expects China and India to be the first countries to show signs of an advertising recovery.

Speaking to the Wall Street Journal, Sorrell said: “I would expect to see a recovery first in China and India. In India, they are arguing whether it will be 6% or 7% growth, and we would give our eye teeth to be flat. Flat in the US and Western Europe is the new up.”

Speaking about what traditional media will look like post-recession, Sorrell said that the implication behind his description of the recession as L-shaped is that there will not be a return to the status-quo.

“The forecast for levels of increase in ad spending, both traditional and nontraditional, are pretty anaemic for the next two or three years,” he said.

“I doubt free-to-air television or, in particular, newspapers and magazines, will ever be the same again. But how do you define a newspaper or a magazine? What is a Kindle? If you get a newspaper downloaded on a Kindle, is that newspapers or not a newspaper? It’s easy to come to generalisations, but that is dangerous. There will be pockets that will be affected but there are pockets that are improving.”

In four or five years’ time, he added, 20% of marketing budgets will go online.” Companies are spending up to 12% to 13% on digital. We know we spend up to 20% of our time online, so in theory spending should be up at 20%. It’s just natural conservatism, resistance to change and inability to adapt to change.

“I believe when digital budgets get to 20%, which will be in four or five years, we will be spending 30% of our time online.”

Sorrell also said that Google has become a much “friendlier frienemy” than it was six to nine months ago. “Google is focusing more on its mobile search and classical search business. We have partnerships with Google, and we are working with them in many areas.”